The Real Social Cost of the Rich's Debt Write-Offs


The vast sums of our money that the state gave to Denis O’Brien are hard to understand. None of us are ever likely to see one million, short of winning the lotto, never mind 336 million, the amount written-off when O’Brien acquired Siteserv Group, Topaz Group and Beacon Private Hospital.

But here is a comparison that helps put the real cost in context. It’s been reported this week that a number of rape crisis centres may have to close because of escalating cash difficulties. These are caused by the loss of €240,000 in core funding. The state funding body Tusla explicitly claimed that the cuts had to happen in order to to make the best use of limited resources.

The three debt write-offs the O’Brien companies got are the equivalent of 1,400 years worth of that core funding. If Catherine Murphy’s Dáil allegation about the preferential interest 1.25% rate he was given are correct then that cost us 30 millions a year, which is around 125 years core funding for every year the loan is not repaid in interest terms alone.

Meanwhile some of the NGO’s that depend on O’Brien’s funding have been deployed in the media to suggest that his willingness to occasionally give away some money means he should be above investigation. Yes he does give some percentage of his income to whatever charities meet his favour. But the fact is that those of us resident in Ireland for tax purposes pay around 30% of our income in order to fund schools, hospitals, sports facilities and NGOs. We get no say in where that money goes and no one prints our photos in the paper or blabs on about our quiet generosity.

There is a cost to the massive subsidies the Irish state hands over to private companies and individuals. Hundreds of millions used to write-off the debts of for-profit companies like Siteserv, Topaz, and Beacon Private Hospital and hundreds of millions not available for very much needed services. Hundreds of millions lost because the very rich can avoid tax by taking very long holidays abroad likewise cuts into funds for health and education. But because the ultra rich control the media the focus is seldom on the money lost. Rather when the like of O’Brien or Bono donate 0.1% of their income to whatever charity has fallen under their benevolent gaze they are lionised as heroes. Meanwhile week in, week out, the rest of us contribute 30% of our incomes.

What sort of society do we want to live in? One where those in difficulty have to hope that the benevolent eye of Bono or O’Brien falls on them, or one where services are fully funded and not at the whim of multi-millionaires or -billionaires?

WORDS: Andrew Flood (Follow Andrew on Twitter)